Dear Reader,
Yesterday marked the 21st record close of the Nasdaq Composite index… this year. It is hard to believe amid a global pandemic and lockdowns that we would see this kind of strength in the stock markets.
The market jitters today were caused by the dramatic “spike” in daily confirmed COVID-19 cases that the U.S. is currently experiencing.
Below is a chart that we won’t see in the papers or on CNN.
We are already two weeks past the beginning of the “spike” in new COVID-19 cases. Yet the COVID-19-related deaths continue to drop. The media would have us all believe that more cases = more deaths and Armageddon, but that’s not what we’re seeing.
The two most important data points for us to follow are serological testing, which identifies what percentage of the population has already had COVID-19 and recovered, and the chart of daily deaths from COVID-19.
Unfortunately, serological testing has been very limited, so we currently don’t have enough data. It baffles me why we aren’t doing more serological testing. It’s almost like we don’t want to know…
But even with inflated death numbers coming in, we can still see the trend. And it is dropping quickly.
What’s the reason for this divergence? How can cases spike but deaths continue to drop? Here’s what I’m seeing:
The U.S. is consistently running more than 500,000 tests a day. That number was only 193,000 on April 23, two months ago. Naturally, we are going to discover more mild, asymptomatic, and presymptomatic cases through more testing.
As economies open up, people in low-risk categories are circulating more. It is natural for there to be some new spread among that demographic. This will help build immunity, as this percentage of the population is highly unlikely to have severe symptoms from COVID-19.
We are getting better at reducing exposure and risk for people in high-risk categories (70+ years old, hypertension, respiratory conditions, morbid obesity, etc.). And that demographic is also more aware of its risk and the importance of taking extra precautions.
The world now has some therapeutic approaches that show efficacy and have received emergency use authorization from the Food and Drug Administration (FDA). In addition to that, promising therapies and vaccines are already being used in clinical trials.
And finally, the normal course of an airborne virus like COVID-19 is to mutate and become weaker. It is very unusual for a coronavirus to mutate and become stronger.
What’s clear to me is that there isn’t just one single factor at work right now. It is a combination of some or all of the above that is contributing to the decline in death rates in the U.S.
There are other factors as well, such as how far and wide COVID-19 has likely already spread among the population. If it is in the 30–60% range, then we may be at the early stages of establishing herd immunity. The same thing may be happening in both the U.K. and Sweden right now.
I’m going to keep a very close eye on this divergence. If it continues, we’re going to learn a lot about COVID-19 and the future direction of the virus.
I’m very optimistic.
Now for our insights…
We are going to start today by talking about goats. That’s right… Goats.
I bet that’s a topic most readers never expected to see in The Bleeding Edge. But there’s an interesting tech angle here, and it all relates to a cancer drug made by Eli Lilly.
Cetuximab is a monoclonal antibody for the treatment of colorectal cancer. This is the key ingredient in Eli Lilly’s branded Erbitux therapy.
But cetuximab is hard to manufacture. To make cetuximab, Eli Lilly must use cultured mouse cells in a laboratory. Because this is a slow and expensive process, a typical month’s worth of treatment will run more than $13,000 without insurance. That makes this a very expensive drug for cancer treatment, especially for those without insurance coverage.
And that’s where goats come in…
A research team in New Zealand just genetically engineered a line of goats to produce the monoclonal antibodies in cetuximab in their milk. And the monoclonal antibodies produced by these transgenic goats demonstrated improved characteristics over lab-made cetuximab. They are safer and more effective in treating cancer.
And it is far cheaper to produce antibodies in goat milk than it is to manufacture them in a lab. After being genetically engineered, goats produce the antibodies every single day without any further inputs.
We don’t know yet what the pricing will be on a cancer treatment using these goat-produced antibodies, but we can be certain it will cost a fraction of what cetuximab does.
And here’s where it gets really exciting – this could be done for all kinds of other antibodies. Scientists could create therapy-specific transgenic animals to produce treatments for other types of cancer far cheaper than their counterparts on the market today. Maybe a transgenic goat could even produce an antibody to help us fight COVID-19.
So goats may hold the key to fighting cancer in the near future.
And I should add that these transgenic goats have a full life. They are not kept in poor living conditions, nor are they slaughtered early. The only difference between them and regular goats is that they can produce a cancer treatment in their milk. Everybody wins.
We talked about Spot last September. Spot is a yellow “doglike” robot made by robotics company Boston Dynamics.
Spot has a wide range of functionality. It can go upstairs and downstairs. It can carry objects around. It can open doors. And Spot is even capable of dancing.
Boston Dynamics’ Spot
Source: Boston Dynamics
And Boston Dynamics has just made the robot commercially available. That’s right – Spot is ready for prime time. In fact, we can buy one online right now.
This is a big development. This tells us that Boston Dynamics has made Spot user-friendly enough to sell on the open market. They have “productized” the robot enough to sell it off the shelf. Just order online, and it will be delivered right to the doorstep.
Spot’s initial price tag is $74,500. That sounds like a lot, but it is a great starting price point for such advanced robotics.
At this price, the current users will be commercial, industrial, and academic. But eventually, hobbyists and robotics fanatics might want to cut their teeth on the first advanced robot to hit the general market.
And Spot is immensely practical. It’s entirely electric, so there’s no gas motor or exhaust. That also means the robot is quiet. The battery lasts 1.5 hours. And Spot comes with a remote that allows users to control it.
And some great add-ons can be purchased.
There is a 360-degree camera that can be mounted on top of Spot. There’s a lidar unit that allows Spot to map its surroundings and then move around autonomously. And Spot can even be programmed to follow its owner. We can imagine journalists rushing out into the field with Spot right behind, camera mounted on top to capture footage.
Adam Savage – the host of the old Discovery show MythBusters – even had some fun by having Spot pull him along in a rickshaw.
Spot Pulling a Rickshaw
Source: The Verge
There are also more advanced artificial intelligence (AI) packages available that allow Spot to make calculations and decisions in real time.
Put it all together, and we have a robotic dog that could move packages around in a warehouse, scan UPCs, provide security surveillance on-site, conduct an inspection on an industrial site, and even gather data in a hazardous environment.
Spot may not yet be like the robot butler we remember from the Jetsons. Perhaps Boston Dynamics is saving that for its next product launch. (Its second robot is a bipedal creation called Atlas that is capable of performing backflips and summersaults, and I suspect a commercial offering isn’t too far off in the future.)
This represents a clear inflection point in the robotics industry. Robots are now modular enough for the open market, and we will see the costs of production decrease rapidly in the coming years.
We talked about Taiwanese semiconductor company MediaTek when it launched its first midrange processor for 5G-enabled phones last December. At the time, it was a sign that 5G was going mainstream.
Well, MediaTek’s latest product launch is even bigger news.
The company just launched a 5G processor for low-end smartphones. This chip will allow a 5G-enabled smartphone to get down in the sub-$300 range. Yet these will be high-quality phones capable of delivering 4K video.
This is important for two reasons.
First, this is bad news for tech giant Qualcomm. I’ll explain with a little context…
As we know, Samsung and Apple are two of the largest smartphone manufacturers in the world. And they each make their own smartphone processors. They aren’t buying from third parties like Qualcomm.
That means companies like Qualcomm and MediaTek must fight over the remaining market share in the industry – and much of it is low-end phones. It’s a very competitive environment that is highly price sensitive.
With that in mind, MediaTek’s new product is better than Qualcomm’s competing processor. And it is cheaper. That dynamic will make it hard for Qualcomm to compete in the low-end segment of the market.
Bigger picture, the fact that MediaTek is out with a competitive low-end 5G processor this early in the smartphone refresh cycle from 4G to 5G phones is incredible.
During the shift from 3G to 4G, it took years to get a low-end processor for low-priced 4G smartphones that were roughly similar to high-end versions.
Semiconductor manufacturing technology back in 2008 and 2009 feels like the Stone Age to me compared to what is considered normal today. Our ability to produce very advanced processors at low price points is nothing like it was a decade ago.
Yet even with the 5G smartphone upgrade refresh cycle in its infancy, we will already have 5G phones priced between $200 to $1,400. Thanks to MediaTek’s new processor, there’s a phone for everyone, regardless of price.
And here’s the big insight – this wide range of options means that we are going to see consumers upgrade from 4G to 5G much sooner in the cycle than they did from 3G to 4G. In fact, this is going to be the largest refresh cycle in the history of wireless technology.
So the adoption of 5G-enabled phones and technology is going to be swift. And as investors, that means we are in the sweet spot for investment targets right now.
Regards,
Jeff Brown
Editor, The Bleeding Edge
P.S. The 5G rollouts continue as planned. And the best 5G stocks are primed to skyrocket.
For investors who aren’t positioned for 5G, now is the time. I’ve released a presentation from the Shubert Theatre, a stone’s throw from Yale, where I am an alumnus. There, I revealed my No. 1 large-cap 5G stock for 2020. See the full presentation for yourself right here.
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
